In the United States today, M1 is the narrow money stock: currency held by the public, demand deposits at commercial banks, and other liquid deposits. Other liquid deposits are other checkable deposits plus savings deposits, including money market deposit accounts. M2 is that M1 total, plus small-denomination time deposits under $100,000 and retail money market fund balances, minus IRA and Keogh balances at depository institutions and money market funds. This page is educational only. It is not investment advice.

CutCurrent US definition
Components of M1 Currency outside the US Treasury, Federal Reserve Banks, and the vaults of depository institutions. Demand deposits at commercial banks, excluding deposits of depository institutions, the US government, and foreign banks and official institutions, after subtracting cash items in the process of collection and Federal Reserve float. Other liquid deposits: other checkable deposits (NOW and automatic transfer accounts, credit union share drafts, and demand deposits at thrifts) plus savings deposits, including money market deposit accounts.
What M2 adds Small-denomination time deposits, issued in amounts of less than $100,000, and balances in retail money market funds. IRA and Keogh account balances at depository institutions and money market funds are then subtracted from the broader total. Savings deposits are not an extra M2 piece. They are already inside M1.
What is excluded Large time deposits, institutional money market funds, repurchase agreements, and Eurodollars. Those items sat in the old M3 aggregate, which H.6 no longer publishes. Deposits denominated in foreign currencies are also outside the money stock. Reserve balances that banks hold at Federal Reserve Banks are in the monetary base, shown separately on H.6, and they are not part of M1 or M2.

A bank money market deposit account is a savings deposit, so it is inside M1. A retail money market mutual fund is not. The fund balance is added only when the Federal Reserve builds M2. Mixing those two “money market” products is the usual reason a list of M1 components looks wrong.

The latest published levels

The H.6 release dated 22 September 2026 reports August 2026 monthly averages. Seasonally adjusted M1 was 19,991.1 billion dollars. Seasonally adjusted M2 was 23,342.8 billion dollars. FRED series M1SL and M2SL carry the same August 2026 observations, updated the same day. These are not a forecast, and the Board revises them. Open the current release before treating a chart as final.

Table 2 of that release splits the August 2026 month. Figures are billions of dollars. Currency, deposits, funds, M1, and M2 in this table are seasonally adjusted. The IRA and Keogh line is not seasonally adjusted, and the release marks it as estimated. The release says components may not add to totals because of rounding.

ComponentAugust 2026
Currency in M12,389.7
Demand deposits7,128.0
Other liquid deposits10,473.5
M119,991.1
Small-denomination time deposits1,505.6
Retail money market funds3,073.9
Less: IRA and Keogh balances (not seasonally adjusted, estimated)1,227.9
M223,342.8

Currency in this M1 line is narrower than currency in circulation on the monetary base. The M1 currency figure leaves out vault cash at depository institutions. In the same release, seasonally adjusted currency in circulation for August 2026 was 2,475.6 billion dollars. Those two currency figures are not substitutes.

Why M1 jumped in May 2020

Before May 2020, savings deposits were in M2 and outside M1. On 15 March 2020 the Board announced that reserve requirement ratios on net transaction accounts would fall to zero, effective 26 March 2020. With reserve requirements at zero, the regulatory split between transaction accounts and savings deposits no longer did the work it was built for. On 24 April 2020 an interim final rule deleted the six-per-month limit on convenient transfers from the savings deposit definition in Regulation D. Savings deposits could then be used for transfers as freely as other checkable deposits.

The H.6 technical Q&A says the Board combined “savings deposits” and “other checkable deposits” into “other liquid deposits” and included that sum in M1. The change was written into the data from May 2020, the first full month after the Regulation D decision. The Board’s notes say the reclassification increases M1 by the industry total of savings deposits, approximately $11.2 trillion, and leaves M2 unchanged. That is a series break. It is not a month in which households printed or earned $11.2 trillion of new cash.

The technical Q&A says the redesign was announced on 17 December 2020 and first published on 23 February 2021, with the history rewritten back to May 2020. The H.6 release of 28 May 2020 still defined M1 without savings deposits. FRED’s note on M1SL matches the rewritten construction: seasonally adjusted M1 sums currency, demand deposits, and other checkable deposits before May 2020, and currency, demand deposits, and other liquid deposits from May 2020.

Example (not advice)

Illustrative only. Suppose a household moves $1,000 from a small time deposit into a savings deposit. Under the current definition, the savings deposit is inside M1 and the small time deposit is not. The transfer can raise M1 and leave M2 unchanged, because the funds were already in M2. Moving the same $1,000 from savings into a checking account stays inside M1. Before May 2020 that second move would have raised M1. It does not do so now. A new bank loan that credits a new deposit is a different story: that can raise both aggregates. This box is a sketch of the definitions. It is not a description of any account and it is not advice.

How retirement balances are removed

A smaller definition change matters if you compare a component chart with M2. Effective with the 28 July 2026 H.6 release, the Board stopped subtracting IRA and Keogh balances inside the small time deposit line and the retail money fund line. It subtracts those balances once, from the M2 total. The technical Q&A says not seasonally adjusted M2 was unchanged, seasonally adjusted M2 had minor revisions, and the two component series are higher because they are no longer reduced by retirement balances. The new netting was applied back to the start of each component series. The 22 September 2026 footnote is the one to use for a current month. Older textbook lists that say the components are already net of IRA and Keogh balances describe the previous method.

United Kingdom: notes and coin, and M4ex

The United Kingdom does not publish an official M1 or M2 in the US sense. The Bank of England’s narrowest published money measure is notes and coin: sterling notes and coin in circulation outside the Bank, including notes and coin in banks’ and building societies’ tills. The monthly series is an average of weekly figures. It is not the notes and coin piece inside M4, which is an end-month stock and covers the M4 private sector only.

The broad measure is M4. M4ex, M4 excluding intermediate other financial corporations, is the measure the Bank describes as more economically relevant than headline M4. Intermediate other financial corporations include non-bank credit grantors, mortgage and housing credit corporations, bank holding companies, securitisation special purpose vehicles, and some intra-group business. Their deposits are closer to the balance sheets of banks and building societies than to money used by households and non-financial firms.

The Bank’s statistics FAQ says production of the older UK M1 has ceased. That old M1 was notes and coin held by the private sector plus non-interest-bearing deposits and interest-bearing sight deposits at banks. Readers who want a retail slice are pointed to what the Bank calls M2, the retail component of M4: private sector notes and coin plus retail deposits at banks and building societies. The Bank also publishes estimates of euro area style M1, M2, and M3 for the UK. None of those is the Federal Reserve aggregate. A US M2 growth rate and a UK M4ex growth rate are not the same fact.

M1 and M2 are cuts of a liquidity spectrum in the US accounts. They are not a switch that turns inflation on or off, and they are not the UK’s labels for the same objects.

Money growth and inflation

Over long spans, money growth that stays far ahead of real output has often come with higher inflation. Over months, the link is loose. Velocity can change. Real output can change. Credit and supply shocks can change. A definition break can move the published stock with no matching change in spending. The May 2020 M1 break is the clean US example.

A classroom identity writes nominal spending as money times velocity, and also as the price level times real output. The velocity of money calculator solves that identity with numbers you type. It does not download M1SL or M2SL. The inflation topic is where those prices are defined, including why US CPI and PCE, and UK CPI and CPIH, are not interchangeable. Real interest rates ask what a quoted yield is worth after inflation. They do not tell you how large M1 or M2 is.

Quantitative easing creates reserve balances and uses them to buy assets, usually longer term government bonds. Those reserve balances are in the monetary base. They are not a line in M1 or M2. Deposits can rise if the sellers hold the proceeds as deposits that the aggregates count, and they need not rise one for one with reserves. Reading an M2 chart as if it were the central bank balance sheet mixes two different stocks.

A separate classroom sketch asks how far a new deposit, or an open market purchase, can expand loans when banks keep a required reserve ratio. The money multiplier calculator runs those rounds. It is not a reading of the H.6 release, and it is not a forecast. The nominal interest rate that goes with a shift of that stock is the money market graph, next to the loanable funds market.

How to read the series

H.6 reports monthly averages, not a single day. Use the seasonally adjusted rows for a path through the year, and the not seasonally adjusted rows when the raw level is the question. After May 2020, the M1 level is not continuous with the earlier M1 level. Growth rates that step across that month mix a definition change into the economics. The same caution applies, on a smaller scale, to component charts of small time deposits and retail money funds around the 28 July 2026 netting change: the components moved because retirement balances were relocated in the arithmetic, while not seasonally adjusted M2 did not.

Short definitions live in the glossary under M1 and M2. The policy setting around the aggregates is the monetary and fiscal policy topic, with quantitative easing and the policy rate as the instruments people usually mean. Country context is on the United States and United Kingdom pages.

Common questions

What does M1 include?

Under the current Federal Reserve H.6 definition, M1 has three parts. Currency outside the US Treasury, Federal Reserve Banks, and the vaults of depository institutions. Demand deposits at commercial banks, excluding amounts held by depository institutions, the US government, and foreign banks and official institutions, minus cash items in the process of collection and Federal Reserve float. And other liquid deposits, meaning other checkable deposits plus savings deposits, including money market deposit accounts. Retail money market mutual funds are not in M1. Savings deposits have been inside M1 from the May 2020 observation onward.

What is the difference between M1 and M2?

M2 includes all of M1. It also includes small-denomination time deposits, which are time deposits issued in amounts of less than $100,000, and balances in retail money market funds. IRA and Keogh account balances at depository institutions and at money market funds are then subtracted. Before May 2020, savings deposits were in M2 and not in M1. Placing them in M1 did not change M2. Large time deposits, institutional money market funds, repurchase agreements, and Eurodollars are outside both aggregates.

Why did M1 jump in 2020?

The May 2020 jump is a break in the series. On 24 April 2020 the Board deleted the six-per-month limit on convenient transfers from savings deposits in Regulation D, after reserve requirement ratios on transaction accounts had been set to zero. Savings deposits then had the same liquidity as other checkable deposits. The H.6 release counts them in M1 from May 2020, inside a line called other liquid deposits. The Board's technical Q&A says this reclassification raises M1 by the industry total of savings deposits, approximately $11.2 trillion, and leaves M2 unchanged. The new tables were first published on 23 February 2021 and written back to May 2020. The jump is not a month in which households created that stock of new currency.

Is M3 still published in the United States?

The current H.6 release does not publish M3. A Board notice said publication of M3 would stop on 23 March 2006, along with large-denomination time deposits, repurchase agreements, and Eurodollars in that release. The notice said M3 did not appear to add information about economic activity beyond M2 and had not been used in the monetary policy process for many years. It also said institutional money market funds would remain a memorandum item. A later redesign, described in the H.6 technical Q&A announced on 17 December 2020, stopped publishing institutional money funds on the release. Large time deposits are not part of M2.

Does money growth cause inflation?

Not in a fixed, one for one way, and not on a set timetable. Over long periods, money growth that stays far ahead of real output has often shown up as higher inflation. Over months, velocity, real output, credit, and supply shocks can move as well, so the price level need not follow the money stock. A definition break can move a published aggregate with no change in spending. The May 2020 rise in US M1 is that kind of break. Reserve balances that banks hold at the Federal Reserve, including reserves created when the central bank buys bonds, are part of the monetary base. They are not M1 or M2. This page does not forecast inflation. It is not investment advice.

Does the United Kingdom publish M1 and M2?

Not an official M1 or M2 in the US sense. The Bank of England's narrowest published money measure is notes and coin: sterling notes and coin in circulation outside the Bank, including holdings in banks' and building societies' tills. Its broad measure is M4. M4ex, which is M4 excluding intermediate other financial corporations, is the Bank's more economically relevant broad money measure. The Bank's statistics FAQ says production of the older UK M1 has ceased. It points readers toward M2 as the retail component of M4, which is notes and coin held by the private sector plus retail deposits. That UK retail M2 is not the Federal Reserve's M2. The Bank also publishes estimates of euro area style M1, M2, and M3 for the UK. Those estimates are a different definition again.

Sources